Jim Hamilton on capitalism

In the comments to Neal's post on suburbia, below, Jim Hamilton wrote:
Capitalism succeeds? Under what fantasy is that true? Without massive government subsidy, very few corporations would have any purchase; they are overweight, overextended, bloated bureaucracies that manage only by means of favorable legislation to minimize costs (of labor, of access to raw materials, of environmental protection) and maximize profits. Without major corporations, capitalism would collapse.

To which I flippantly replied:
Are you referring to our current, consumeristic and marketing-based form of "capitalism?" I'm not a fan of hands-off capitalism, but even Adam Smith would be somewhat taken aback at the sheer number of people employed to make fashionable clothing for our dogs and cats.

I am not one of those who thinks that capitalism is inherently just, and I would certainly not trust the marketplace to address all, or even most, social concerns. But to say it's not successful seems to run contrary to even the claims of folks who are quite hostile to capitalism.

Since I can't figure out what he means, I invite him to answer the question:

What is Jim Hamilton talking about?

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